Back to top

Image: Bigstock

MPTI vs. HWM: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in Engineering - R and D Services stocks are likely familiar with M-tron Industries, Inc. (MPTI - Free Report) and Howmet (HWM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, M-tron Industries, Inc. has a Zacks Rank of #1 (Strong Buy), while Howmet has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MPTI has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

MPTI currently has a forward P/E ratio of 11.84, while HWM has a forward P/E of 26.80. We also note that MPTI has a PEG ratio of 0.70. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HWM currently has a PEG ratio of 1.61.

Another notable valuation metric for MPTI is its P/B ratio of 2.16. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HWM has a P/B of 5.04.

These metrics, and several others, help MPTI earn a Value grade of B, while HWM has been given a Value grade of D.

MPTI stands above HWM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MPTI is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Howmet Aerospace Inc. (HWM) - free report >>

M-tron Industries, Inc. (MPTI) - free report >>

Published in